<Page>

                                   FORM 10-QSB



               Quarterly Report Under Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                  For the quarterly period ended July 31, 2002

                           Commission File No. 1-8125


                                  TOROTEL, INC.
        (Exact name of small business issuer as specified in its charter)


           MISSOURI                                      44-0610086
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                13402 SOUTH 71 HIGHWAY, GRANDVIEW, MISSOURI 64030
                    (Address of principal executive offices)


                                 (816) 761-6314
                           (Issuer's telephone number)


                                      NONE
              (Former name, former address and former fiscal year,
                          if change since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months and (2) has been
subject to such filing requirements for the past 90 days.

                                   Yes  X   No
                                       ---     ---

As of September 11, 2002, there were 5,111,590 shares of Common Stock, $.01 Par
Value, outstanding.



<Page>


                         TOROTEL, INC. AND SUBSIDIARIES



                                      INDEX



<Table>
<S>  <C>  <C>                                                                                       <C>
PART I.    FINANCIAL INFORMATION

      Item 1.   Financial Statements

           Consolidated Balance Sheet as of July 31, 2002                                             1

           Consolidated Statements of Operations for the three months
                ended July 31, 2002 and 2001                                                          2

           Consolidated Statements of Cash Flows for the three months
                ended July 31, 2002 and 2001                                                          3

           Notes to Consolidated Financial Statements                                                 4

      Item 2.   Management's Discussion and Analysis or Plan of Operation                            10



PART II.   OTHER INFORMATION

      Item 1.   Legal Proceedings                                                                    12

      Item 6.   Exhibits and Reports on Form 8-K                                                     12



SIGNATURES                                                                                           13
</Table>




<Page>


PART I.    FINANCIAL INFORMATION


Item 1.    Financial Statements

CONSOLIDATED BALANCE SHEET (Unaudited)
As of July 31, 2002


<Table>
<S>                                                                <C>
ASSETS

Current assets:
     Cash                                                           $   368,000
     Accounts receivable, net                                           660,000
     Current maturity of note receivable                                122,000
     Inventories                                                        229,000
     Prepaid expenses and other current assets                           58,000
                                                                    -----------
                                                                      1,437,000

Property, plant and equipment, net                                      289,000

Other assets                                                              3,000
Intangible assets, net                                                2,299,000
Equity investment                                                     1,045,000
                                                                    -----------

                                                                    $ 5,073,000
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current maturities of long-term debt                           $   128,000
     Trade accounts payable                                             768,000
     Accrued liabilities                                                251,000
                                                                    -----------
                                                                      1,147,000

Long-term debt, less current maturities                                 372,000

Note payable to shareholders                                            750,000

Stockholders' equity:
     Common stock, at par value                                          52,000
     Capital in excess of par value                                  12,362,000
     Accumulated deficit                                             (9,405,000)
                                                                    -----------
                                                                      3,009,000
     Less treasury stock, at cost                                       205,000
                                                                    -----------
                                                                      2,804,000
                                                                    -----------

                                                                    $ 5,073,000
                                                                    ===========
</Table>

         The accompanying notes are an integral part of this statement.


                                        1

<Page>

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended July 31,


<Table>
<Caption>
                                                                                       2002              2001
                                                                                   -----------        ---------
<S>                                                                               <C>                <C>
Net sales                                                                          $ 1,140,000        $ 945,000
Cost of goods sold                                                                     623,000          539,000
                                                                                   -----------        ---------

     Gross profit                                                                      517,000          406,000

Operating expenses:
     Engineering                                                                        48,000           43,000
     Selling, general and administrative                                               238,000          202,000
     Amortization of intangible assets                                                  83,000             -
                                                                                   -----------        ---------
                                                                                       369,000          245,000
                                                                                   -----------        ---------

     Earnings from operations                                                          148,000          161,000

Other expense (income):
     Interest expense                                                                   21,000           13,000
     Interest income                                                                    (3,000)          (6,000)
     Other, net                                                                         (1,000)            -
                                                                                   -----------        ---------
                                                                                        17,000            7,000
                                                                                   -----------        ---------

     Earnings before provision for income taxes, equity
           in earnings of investee and extraordinary item                              131,000          154,000

Provision for income taxes                                                                -                -
                                                                                   -----------        ---------

     Earnings before equity in earnings of investee
           and extraordinary item                                                      131,000          154,000

Equity in earnings of investee                                                          10,000             -
                                                                                   -----------        ---------

     Earnings before extraordinary item                                                141,000          154,000

Extraordinary item:
     Gain on settlements of debt                                                          -              27,000
                                                                                   -----------        ---------

Net earnings                                                                       $   141,000        $ 181,000
                                                                                   ===========        =========


Basic earnings per share:
      Earnings before extraordinary item                                                 $ .03            $ .05
      Extraordinary item                                                                   -                .01
                                                                                         -----            -----
                                                                                         $ .03            $ .06
                                                                                         =====            =====

Diluted earnings per share:
      Earnings before extraordinary item                                                 $ .03            $ .05
      Extraordinary item                                                                   -                .01
                                                                                         -----            -----
                                                                                         $ .03            $ .06
                                                                                         =====            =====
</Table>


        The accompanying notes are an integral part of these statements.


                                        2

<Page>

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended July 31,


<Table>
<Caption>
                                                                                      2002             2001
                                                                                   ---------        ---------
<S>                                                                               <C>              <C>
Cash flows from continuing operating activities:
     Net earnings                                                                  $ 141,000        $ 181,000
     Adjustments to reconcile net earnings to net cash
         provided by operations:
           Gain on minority share interest                                           (10,000)            -
           Gain on settlements of debt                                                  -             (27,000)
           Depreciation and amortization                                              94,000           14,000
           Increase (decrease) in cash flows from operations
              resulting from changes in:
                Accounts receivable                                                  (40,000)          (8,000)
                Inventories                                                          (63,000)         (30,000)
                Prepaid expenses and other assets                                    (42,000)         (19,000)
                Trade accounts payable                                                32,000          (15,000)
                Accrued liabilities                                                   16,000           (5,000)
                Income Taxes Payable                                                  (8,000)            -
                                                                                   ---------        ---------

Net cash provided by operating activities                                            120,000           91,000
                                                                                   ---------        ---------

Cash flows from investing activities:
     Capital expenditures                                                             (4,000)            -
     Proceeds from note receivable                                                    39,000           36,000
     Electronika acquisition costs                                                   (53,000)            -
     Apex acquisition costs                                                          (35,000)            -
                                                                                   ---------        ---------

Net cash provided by (used in) investing activities                                  (53,000)          36,000
                                                                                   ---------        ---------

Cash flows from financing activities:
     Principal payments on long-term debt                                            (37,000)         (78,000)
     Payments on capital lease obligations                                              -              (2,000)
                                                                                   ---------        ---------

Net cash used in financing activities                                                (37,000)         (80,000)
                                                                                   ---------        ---------

Net increase in cash                                                                  30,000           47,000
Cash beginning of three-month period                                                 338,000          321,000
                                                                                   ---------        ---------

Cash end of three-month period                                                     $ 368,000        $ 368,000
                                                                                   =========        =========


Supplemental Disclosures of Cash Flow Information
     Cash paid during the period for:
              Interest                                                             $  21,000        $  13,000
              Income taxes payable                                                 $   8,000        $    -
</Table>


        The accompanying notes are an integral part of these statements.


                                        3

<Page>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 1 - Basis of Presentation

      Torotel specializes in the custom design and manufacture of a wide variety
of precision magnetic components, consisting of transformers, inductors,
reactors, chokes and toroidal coils, for use in commercial, industrial and
military electronics. Torotel also designs and distributes ballast transformers
for the airline industry. Approximately 98% of Torotel's sales are derived from
domestic customers. The accompanying unaudited consolidated financial statements
reflect the normal recurring adjustments which are, in the opinion of
management, necessary to present fairly Torotel's financial position at July 31,
2002, and the results of operations for the three months ended July 31, 2002.

      The financial statements contained herein should be read in conjunction
with Torotel's financial statements and related notes filed on Form 10-KSB for
the year ended April 30, 2002.


Note 2 - Inventories

      The components of inventories are summarized as follows:

<Table>
          <S>                                               <C>
           Raw materials                                     $  27,000
           Work in process                                     202,000
                                                             ---------
                                                             $ 229,000
                                                             =========
</Table>


Note 3 - Income Taxes

      Torotel has net operating loss carryforwards available as benefits to
reduce future income taxes, subject to applicable limitations. These operating
loss carryforwards expire in various amounts in the years 2003 through 2014.

      The difference between the financial and tax bases of assets and
liabilities is determined annually. Deferred income taxes and liabilities are
computed for those differences that have future tax consequences using the
currently enacted tax laws and rates that apply to the periods in which they are
expected to effect taxable income. Valuation allowances are established, if
necessary, to reduce the deferred tax asset to the amount that will, more likely
than not, be realized. Income tax expense is the current tax payable or
refundable for the period plus or minus the net change in the deferred tax
assets or liabilities.

      The following table summarizes the components of the net deferred tax
asset:

<Table>
          <S>                                             <C>
           Net operating loss carryforwards                $ 2,154,000
           Inventory valuation                                 190,000
           Tax credit carryforwards                             20,000
           Other                                                48,000
                                                           -----------
                                                             2,412,000
           Less valuation allowance                          2,412,000
                                                           -----------

                                                           $      -
                                                           ===========
</Table>


                                        4

<Page>

Note 4 - Earnings Per Share

      Statement of Financial Accounting Standards (SFAS) No. 128, EARNINGS PER
SHARE, requires dual presentation of basic and diluted EPS on the face of the
statement of earnings regardless of whether basic and diluted EPS are the same;
and requires a reconciliation of the numerator and denominator used in computing
basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing
earnings available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted EPS is computed similarly to
fully diluted EPS pursuant to APB Opinion 15. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Pursuant to SFAS
No. 128, the basic and diluted earnings per common share were computed as
follows:

<Table>
<Caption>
      YEAR-TO-DATE EPS CALCULATIONS                         2002             2001
                                                        -----------      -----------
     <S>                                               <C>              <C>
         Net earnings                                   $   141,000      $   181,000
         Weighted average common shares outstanding       5,111,590        2,811,590
         Incremental shares                                  40,773             -

         Basic earnings per share                       $       .03      $       .06
         Diluted earnings per share                     $       .03      $       .06
</Table>

No incremental shares are included in the EPS calculations for 2001 because the
market price of Torotel's common stock being lower than the exercise price of
the stock equivalents under contract.


Note 5 - Financing Agreements

      Under the terms of a loan with Vista Bank, N.A., Torotel is required to
comply with certain covenants including restrictions on the payment of cash
dividends. Torotel was in violation of a current ratio covenant at April 30,
2002; however, the bank waived compliance with the subject provision as of April
30, 2002. As of July 31, 2002, Torotel has cured the default and is now in
compliance with the current ratio covenant.


Note 6 - Employee Stock Options

      In accordance with the Incentive Compensation Plan approved by
shareholders on September 19, 1994, Torotel reserved 400,000 common shares for
issuance to key employees pursuant to the exercise of incentive and
non-qualified stock options granted prior to June 20, 2004. The options are
accounted for under APB Opinion 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES,
and related interpretations. The incentive stock options have a term of five
years when issued and vest 50% per year at the end of each of the first two
years. The non-qualified stock options have a term of ten years when issued and
vest 25% per year at the end of each of the first four years. The exercise price
of each option equals the market price of Torotel's common stock on the date of
grant. Accordingly, no compensation cost will be recognized upon the grant of


                                        5

<Page>

Had compensation cost for the Plan been determined based on the fair value of
the options at the grant dates consistent with the method of Statement of
Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
the Company's operating results would have been reduced to the pro forma amounts
indicated below.

<Table>
<Caption>
                 YEAR-TO-DATE                                        2002         2001
                                                                  ---------    ---------
          <S>                                     <C>            <C>          <C>


           Earnings before extraordinary item      As Reported    $ 141,000    $ 181,000
                                                   Pro Forma      $ 134,000    $ 181,000

           Basic earnings per share                As Reported    $     .03    $     .06
                                                   Pro Forma      $     .03    $     .06

           Diluted earnings per share              As Reported    $     .03    $     .06
                                                   Pro Forma      $     .03    $     .06
</Table>

      The fair value of the incentive stock options granted was estimated on the
date of grant using the Black-Scholes options-pricing model. The fair value of
the options was determined using the following weighted average assumptions: no
dividend payments over the life of the options; expected volatility of 551.0%;
risk-free interest rate of 3.50%; and expected life of five years.

      Stock option transactions under the 1994 Incentive Compensation Plan for
each period are summarized as follows:

<Table>
<Caption>
                                                              2002                                2001
                                                -----------------------------        -----------------------------
                                                 Weighted                             Weighted
                                                  Shares           Average             Shares           Average
                                                  Under           Exercise             Under           Exercise
                                                  Option            Price              Option            Price
                                                ----------      -------------        ----------      -------------
     <S>                                       <C>             <C>                  <C>             <C>
      Outstanding at beginning of period          40,000            $.37                 -                 -
      Granted                                       -                -                   -                 -
      Exercised                                     -                -                   -                 -
      Forfeited                                     -                -                   -                 -
                                                ----------                           ----------
      Outstanding at end of period                40,000            $.37                 -                 -
                                                ==========                           ==========

      Options exercisable at end of period        20,000            $.37                 -                 -
      Weighted average fair value of
          options granted during the year                            -                                     -
</Table>

The following information applies to options outstanding at July 31, 2002:

<Table>
          <S>                                              <C>
           Number outstanding                               40,000
           Range of exercise prices                           $.37
           Weighted average exercise price                    $.37
           Weighted average remaining contractual life        4.25 yrs.
</Table>


Note 7 - Stock Warrants

      Pursuant to a settlement that ended a class action alleging racial
 discrimination in hiring by Torotel


                                        6

<Page>

Products, Inc., Torotel agreed to issue a warrant certificate to the Torotel
Settlement Fund to purchase 100,000 shares of Torotel, Inc. common stock at $.75
per share. The warrant is 100% vested upon issuance and cannot be exercised
until the market price of the company's common stock reaches $2.00 per share.
The warrant expires on May 4, 2003.

      The $33,000 fair value of the warrant was estimated on the date of grant
using the Black-Scholes options-pricing model using the following weighted
average assumptions: no dividend payments over the life of the warrant; expected
volatility of 75.9%; risk-free interest rate of 5.8%; and expected life of two
years.

      Stock warrant transactions for each period are summarized as follows:

<Table>
<Caption>
                                                              2002                                2001
                                                -----------------------------        -----------------------------
                                                 Weighted                             Weighted
                                                  Shares           Average             Shares           Average
                                                  Under           Exercise             Under           Exercise
                                                  Option            Price              Option            Price
                                                ----------      -------------        ----------      -------------
     <S>                                       <C>             <C>                  <C>             <C>
      Outstanding at beginning of period         100,000            $.75              100,000            $.75
      Granted                                       -                -                   -                -
      Exercised                                     -                -                   -                -
      Forfeited                                     -                -                   -                -
                                                ----------                           ----------
      Outstanding at end of period               100,000             $.75             100,000            $.75
                                                ==========                           ==========

      Warrants exercisable at end of period         -                 -                  -                -
      Weighted average fair value of
          warrants granted during the year                            -                                   -
</Table>

The following information applies to warrants outstanding at July 31, 2002:

<Table>
          <S>                                              <C>
           Number outstanding                               100,000
           Range of exercise prices                            $.75
           Weighted average exercise price                     $.75
           Weighted average remaining contractual life          .75 yrs.
</Table>


Note 8 - Extraordinary Item

      For the three months ended July 31, 2001, the extraordinary item as
presented in the accompanying consolidated statements of operations includes a
gain of $27,000 resulting from the settlement of old liabilities at amounts
lower than that originally recorded.


Note 9 - Amortization of Intangibles

      The following table provides the gross carrying value and accumulated
amortization for each major class of intangible asset based on Torotel's
reassessment of previously recognized intangible assets and their remaining
amortization lives in accordance with the adoption of Statement of Financial
Accounting Standards No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS:


                                        7

<Page>

<Table>
<Caption>
                                                                 2002                                  2001
                                                      ---------------------------         ----------------------------
                                     Average            Gross                               Gross
                                   Amortizable        Carrying       Accumulated           Carrying       Accumulated
                                      Life             Amount        Amortization           Amount        Amortization
                                   -----------       ----------      ------------          --------       ------------
      <S>                          <C>               <C>             <C>                   <C>            <C>
      Order backlog                     1            $  205,000      $     51,000          $   -          $     -
      Aircraft                         17             2,177,000            32,000              -                -
                                                     ----------      ------------          --------       ------------

                                                     $2,382,000      $     83,000          $   -          $     -
                                                     ==========      ============          ========       ============

</Table>

The total intangible amortization expense for the three months ended July 31,
2002, was $83,000. The estimated aggregate amortization expense for each of the
next five years is as follows:

<Table>
<Caption>
                 April 30,                  Amount
                ---------                ------------
               <S>                      <C>
                  2003                   $    332,000
                  2004                        127,000
                  2005                        127,000
                  2006                        127,000
                  2007                        127,000
                                         ------------

                                         $    840,000
                                         ============
</Table>

Note 10 - Equity Investment

      On March 29, 2002, Torotel acquired a 17% equity interest in Apex
Innovations, Inc. The investment is accounted for using the equity method of
accounting. The accompanying consolidated statement of operations for the three
months ended July 31, 2002, includes a $10,000 profit resulting from Apex's
operating results for the three months ended May 31, 2002. Condensed financial
statements for Torotel's investment in Apex are as follows:

                             Condensed Balance Sheet

<Table>
<Caption>
                                                   May 31,
                                                    2002
                                                ------------
  <S>                                          <C>
   Current assets                               $  1,569,000
   Other assets                                    4,725,000
                                                ------------
                                                $  6,294,000
                                                ============

   Current liabilities                          $    410,000
   Other liabilities                               2,407,000
   Stockholders' equity                            3,477,000
                                                ------------
                                                $  6,294,000
                                                ============
</Table>

                       Condensed Statements of Operations

<Table>
<Caption>
                                          3-Mos. Ended      2-Mos. Ended
                                             May 31,        February 28,
                                              2002              2002
                                          ------------      ------------
  <S>                                    <C>               <C>
   Net sales                              $  1,383,000      $   534,000
   Gross profit                           $    599,000      $   315,000
   Net earnings                           $     58,000      $     8,000
</Table>

                                        8

<Page>


Note 11 - Discontinued Subsidiary

      The operations of East Coast Holdings, Inc. (formerly named OPT
Industries, Inc.), a wholly-owned subsidiary of Torotel, were discontinued in
April 1999, and the assets sold to Shared Information Group Management
Associates, L.L.C ("SIGMA"). The remaining assets and liabilities related to
this subsidiary as of July 31, 2002, are included in the accompanying
consolidated balance sheet under the following captions and in the amounts
shown:

<Table>
  <S>                                              <C>
   Current maturity of note receivable              $    122,000
   Current maturities of long-term debt             $     75,000
   Trade accounts payable                           $    395,000
   Accrued liabilities                              $     50,000
</Table>


Note 12 - Acquisition

      On April 2, 2002, Torotel acquired 100% of the common stock of
Electronika, a custom design, marketing and licensing company selling ballast
transformers to the airline industry for use as spare and replacement parts in
DC-8, DC-9, DC-10, MD-80, and MD-88 aircraft. The total purchase price of
$2,382,000 consisted of 2,300,000 unregistered shares of Torotel common stock
and $82,000 in acquisition costs. For accounting purposes, April 1 is considered
the effective date of the acquisition.

      The accompanying consolidated statements of operations include the
operating results of Electronika for the three months ended July 31, 2002. The
following unaudited pro forma summaries present the consolidated results of
operations as if the acquisition had occurred at the beginning of the periods
presented. The pro forma results include the effects of amortizing intangible
assets and exclude compensation in excess of amounts payable after the
acquisition.

<Table>
<Caption>
                                                                Pro Forma Information
                                                                 Three Months Ended
                                                                        July 31,
                                                           -------------------------------
                                                                2002              2001
                                                           -------------     -------------
 <S>                                                      <C>               <C>
  Net sales                                                $   1,140,000     $   1,325,000
  Earnings before extraordinary item                       $     192,000     $     291,000
  Net earnings                                             $     192,000     $     318,000


  Basic earnings per share before extraordinary item       $         .04     $         .06
  Basic earnings per share                                 $         .04     $         .06

  Diluted earnings per share before extraordinary item     $          04     $         .06
  Diluted earnings per share                               $         .04     $         .06
</Table>

     The pro forma information does not purport to be indicative of the results
of operations that would have occurred had the acquisition taken place at the
beginning of the periods presented or of future results of operations.


                                        9

<Page>

Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      The following management comments regarding Torotel's results of
operations and outlook should be read in conjunction with the Consolidated
Financial Statements included pursuant to Item 1 of this Quarterly Report.

      The discussion and analysis of the results of operations include the
operations of Torotel, Inc. and its subsidiaries, Torotel Products, Inc. and
Electronika, Inc. (see Note 12 of Notes to Consolidated Financial Statements).

THREE MONTHS ENDED JULY 31, 2002 VERSUS THREE MONTHS ENDED JULY 31, 2001

      Net sales increased nearly 21%. The net sales of Torotel Products
increased slightly from $945,000 to $958,000. The rate of new order bookings is
on par with last year; however, the product mix is beginning to shift more
toward defense. This trend is expected to continue as new contract awards
associated with ongoing military programs are anticipated. The net sales of
Electronika were $182,000. Management remains optimistic about Torotel's sales
outlook.

      Gross profit as a percentage of net sales increased slightly more than 2%.
The gross profit percentage of Torotel Products remained unchanged at 43%.
Electronika's gross profit as a percentage of net sales was 60%.

      Engineering expenses, applicable only to Torotel Products, increased 12%
from $43,000 to $48,000 because of higher payroll costs associated with more
hours worked by part-time personnel and higher travel costs associated with
visits to a subcontracting facility in Mexico. Management does anticipate an
increase in the present level of engineering expenses during the next few
quarters.

      Selling, general and administrative (SG&A) expenses increased 18%. The
SG&A expenses of Torotel, Inc. increased 97% from $30,000 to $59,000 because of
higher compensation costs associated with Torotel's chairman and CEO (who
received no compensation in last year's period). The SG&A expenses of Torotel
Products decreased slightly from $172,000 to $171,000. The SG&A expenses of
Electronika were $8,000. Management does anticipate an increase in the present
level of SG&A expenses during the next few quarters.

      Amortization costs, entirely attributable to Electronika, were $83,000
(see Note 9 of Notes to Consolidated Financial Statements).

      Interest expense increased nearly 62%. The interest expense of Torotel,
Inc. increased 300% from $4,000 to $16,000 because of the higher debt resulting
from the equity investment in Apex. The interest expense of Torotel Products
decreased 44% from $9,000 to $5,000 because of lower debt balances and a lower
annual interest rate on the mortgage payable to Vista Bank.

      Interest income decreased 50% from $6,000 to $3,000 due to a lower
principal balance on the note receivable from SIGMA.

      For the reasons discussed above, the consolidated pretax earnings
decreased from $154,000 to $131,000. The pretax loss of Torotel, Inc. increased
from $28,000 to $71,000. The pretax earnings of Torotel Products increased from
$182,000 to $184,000. The pretax earnings of Electronika were $18,000.


                                       10

<Page>

LIQUIDITY AND CAPITAL RESOURCES

      Torotel relies on funds generated internally to meet its normal operating
requirements and to service bank indebtedness. Management continues to evaluate
ways of improving Torotel's liquidity position and funding future investments.

      During the three months ended July 31, 2002, Torotel's operations provided
$120,000 in cash flow because of operating earnings. Cash flow was adversely
impacted by slower payment practices of major customers and a higher level of
work in process associated with a new contract for potted coil assemblies for
the Hellfire II missile system.

      Investing activities used $53,000 in cash flow because of the acquisitions
costs associated with Electronika and Apex (see Notes 10 and 12 of Notes to
Consolidated Financial Statements). These payments were offset partially by the
proceeds from the note receivable from SIGMA. Torotel had capital expenditures
of $4,000 during the three months ended July 31, 2002, and anticipates
approximately $45,000 in capital expenditures during the balance of fiscal 2003.

      Financing activities used $37,000 in cash flow because of decreases in
long-term debt.

      Management believes that inflation will have only a minimal effect on
future operations since such effects will be offset by sales price increases
which are not expected to have a significant effect upon demand.

OTHER

      Except for historical information contained herein, certain of the matters
discussed above are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to the safe harbor
created by that Act. These statements are based on assumptions about a number of
important factors and involve risks and uncertainties that could cause actual
results to be different from what is stated here. These risk factors are:
impairment of intangible assets, decreased demand for products, delays in
developing new products, expected orders that do not materialize, loss of key
customers, the impact of competition and price erosion as well as supply and
manufacturing constraints, and other risks and uncertainties.


                                       11


<Page>

PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings

      The remaining liabilities related to the discontinued operations of ECH
include trade accounts payable of $395,000 (see Note 11 of Notes to Consolidated
Financial Statements). Several claims have been filed by vendors for collection
of amounts due, and more could be filed. Since ECH's remaining assets have been
assigned as collateral for the remaining bank debt, ECH has no other source of
income to satisfy its trade debt obligations. This trade debt remains the sole
responsibility of ECH. Neither Torotel, Inc. or Torotel Products, Inc. has
assumed these obligations. While some of the claims by ECH vendors have resulted
in judgments against ECH, neither Torotel, Inc. or Torotel Products, Inc.
intends to provide any funds to satisfy the judgments nor are they obligated to
do so.


Item 6.   Exhibits and Reports on Form 8-K

    a)    Exhibits

           Exhibit 99.1        Certification Pursuant to 18 U.S.C. Section 1350,
                                as Adopted Pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002
           Exhibit 99.2        Certification Pursuant to 18 U.S.C. Section 1350,
                                as Adopted Pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002

    b)    Reports on Form 8-K  There were two reports filed on Form 8-K during
                                the three months ended July 31, 2002.



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<Page>

                                   SIGNATURES

      In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


Torotel, Inc.
(Registrant)




Date: September 12, 2002                     /s/  H. James Serrone
      ----------------------                 ---------------------------------
                                             H. James Serrone
                                             Vice President of Finance and
                                             Chief Financial Officer





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